Friday's Financial Winners & Losers

Financial stocks were stuck in the red yet again on Friday even as the rest of the market booked a modest recovery from yesterday's late downturn.

Among the losers was Fannie Mae (FNM Quote), whose shares slid as much as 12% a day after Fortune reported that the mortgage investor could be using shady accounting methods in order to cover up the full extent of its subprime-induced credit losses. According to the report, the company's third-quarter credit-loss ratio would have been 7.5 basis points under the old method -- amid an overall loss that more than doubled from last year -- whereas Fannie's disclosure had it at 4 basis points.

CFO Stephen Swad defended Fannie in a conference call today, intoning that the practice "has the effect of pulling forward losses well before they are realized," according to Reuters. He said Fannie expects to recover a portion of that quarter's $670 million credit-loss provision. ...